Are Amazon and Whole Foods Already Tripping Over Each Other?

Kotter
, ContributorWe write about leading through complex change.Opinions expressed by Forbes Contributors are their own.

Post written by

Vanessa LoVerme Akhtar

Vanessa LoVerme Akhtar, Ed.D. is a Principal at Kotter International – a firm that helps clients overcome the barriers to complex change.

(Photo by Drew Anthony Smith/Getty Images)

If you have a smart phone or computer, it’s been nearly impossible to miss the news that Amazon is set to acquire Whole Foods for $13.7 billion. Thinking back, it has been awhile since the announcement of a major acquisition has generated this much buzz. Maybe that’s because this is a somewhat surprising partnership — one that some see as innovative and interesting, and others find confusing. Whatever the reasoning behind this move, I’ve noticed a critical nuance already at play that could lead to some serious challenges moving forward.

The majority of the headlines read, “Amazon set to acquire Whole Foods” (or something along those lines). Then, I received an email from Whole Foods — sent to their entire customer subscriber list — to share their excitement about merging with Amazon. It might not seem like anything at first glance, particularly from a customer lens. But, from an employee perspective, there is an important distinction between “acquisition” and “merger.”

With any M&A effort, there’s likely to be high levels of anxiety amongst employees. Someone who felt a high sense of job security may now be wondering, “will I have a job in six months?” This is especially true for employees from the company being acquired. There’s also a fear of losing what people most value about their work — whether that’s the organizational culture, a respected leader or familiar systems and processes. In the midst of a merger, these things might be a bit more nuanced. In that scenario, there’s often a perceived jockeying for “top spot.” These unknowns can lead to high turnover rates (often of top talent because they have the easiest time finding a new position, or are offered sizable severance packages), lost revenue or stock prices and increased costs for things like systems integration. It’s hard to imagine a company would willingly take on these risks without a real belief in the potential benefits down the road.

If Amazon and Whole Foods want to avoid the potholes that most companies fall into during the M&A process, leaders from both organizations need to communicate an aligned message around their vision. Employees are hungry for a sense of what the future will look like and what role they can play in it. Loyal customers — especially those who are loyal to only one of the two brands — want to understand what the consumer experience will be like. Will it get worse before it gets better? Will the ethos/values of one organization become the ethos/values of the other?

The most successful M&As capitalize on the strengths of each of the organizations coming together. Leaders from these two disparate businesses need to clearly articulate what they believe is possible together if they can truly leverage the best from each company. Providing a consistent message will begin to ease some of the fear that employees will inevitably feel as part of this process. And, allowing space for employees to voice their concerns and ideas for how to combat the natural growing pains of an M&A will increase their engagement in this process. Employees will be the most critical lever for quickly seizing the opportunity ahead of Amazon and Whole Foods…but first they need to know what that opportunity is.